All Forum Posts by: Andrew Jackson

@Jeff Rappaport Will be there! Thank you.

There is a but if a better deal in my opinion. there's a 9 unit apartment complex for sale at $227k. I'm assuming 30k in rehab (some need windows, floors, kitchen appliances in all and potentially new cabinets... I figured close to 3k for each unit... might be low) it's 13 total bedroom so I'm assuming, that 5 are 1 bedroom (450 rent per month* 5= 2250 per month) then the 4 2 bedroom ($550 *4=2200) expenses (mortgage, insurance, taxes,and maintenance, property management (however I'd like to do the managing)- 50% rule $2225 Gross monthly income 4450- 2225= $2225 per month (NOI year $26700) Estimated cost to close $93k cash on cash 28% it's been awhile since I've crunched multi unit numbers so those might be off.

So these people are family friends and are business owners in a small rural area. the duplex they in is not in top shape, but the owner and her family will be occupying both units, and pay all utilities. I own another duplex in town (which I obtained via fha loan for $120k) the total rent from it is 1300, and it costs me (mortgage, insurance and taxed) $650. the rent I would charge them would be 550-600 each unit so we'll call it 1100 a month. what I offered them when I told them to do seller financing for 1 year is id pay them $600 a month to cover the loan, and let them live there rent free until we can refinance. I informed to hem most banks loan between 70-80 LTV so it is likely they won't get the full 95k. they were ok with that however we never came to a hard number. I checked the outside of the duplex and it looks like most of the properties in my area, not awesome, but liveable and plenty of room to add value (yard work, spruce up the exterior, etc) I'm hoping in the year its under seller financing I can fix it up to the value of my other duplex in the area and it'll be worth around $140k once I have it refinanced (assuming 95k on a 15 year loan at 6% interest) the mortgage will be $680, insurance $25, property tax $75. Ends up being $780 a month with $1100 coming in from rent. so it'll net $300 a month. I know that the numbers for rent, tax and insurance seem low, but I live in a small rural area of Eastern Utah. thoughts? and thank you for all the input! Makin me think.

Hello! I was approached by a local business owner of a Chinese buffet; who also happens to own a duplex which she and her family members live in. She told me she would like to sell me her duplex which she owns outright for 95k. I said that's great, I'd love to buy it, however I don't have the money to put down on the house to go through the bank (I really don't) how would you feel about seller financing and then we could refinance through the bank in 1 year. Due to a language barrier, she had a difficult time understanding how seller financing would work. I even spoke with her sister and other relatives to help break the language barrier, but nonetheless they didn't understand. Instead of trying to understand seller financing, she said, "what if my husband and I give you the money to put down for the house and you let us continue living at the house rent free for 1 year." I agreed again, but when I took this idea to the bank they shut me down and said it was a gift and the bank doesn't work with gifts... They told me The reason they want to sell so bad is because of how the property impacts their taxes... again the language barrier makes it difficult to understand, but it seems like a great deal to not pursue further. These people are basically trying to give me the property and I can't figure out how to obtain it. Does anyone have any advice on how I could get the bank on my side, or any other paths that can help me get this duplex? Thank you!

So using the numbers they gave me, this year the 10 Plex is operating at an NOI of $5000 assuming one of the apartments is rented as evidenced by a recent security deposit. This gives it a cap rate of 1.6 which is bad. If that apartment is not rented the NOI is -3760, which is worse. One thing I did was not factor in is the security deposits to cover a lot of the maintenance, which could reduce the maintenance cost. The financials reveal that over 6 months the maintenance plus management for 7 apartments rented is 3200. I multiplied that by 2 to get a yearly expense. I also added what it would cost if I had all tem rented and this is likely to be about 8000. If I assume I can rent all 10 units at $400 per month the rent income minus all expenses (maintenance, management, insurance, taxes and vacancy) the NOI could be $19000. it's obviously a long ways from that. if I go for the cap rate I want I would have to purchase this property for ~$190000 (19000/.01= cap rate) Does this seem more accurate? and what do you all think? thanks again!

@Adam Sheren I have gathered the rent roll and 8 of the ten units are rented out. 5 of which are rented for 400 a month or greater the others range from 325-375. This will definitely impact NOI, so thank you for pointing that out. I have an appointment to see the complex on Thursday. the company that is listing the sale is also the property manager so they should give me some good info and I have been preparing questions. The tax is from the county website, and it actually says 1800 I just rounded up. The insurance I calculated by what seems to be an average for what other people say they pay for 10 Plex apartments, but I did not multiply my number by 12 to get a years estimate, so I'll adjust that in my numbers. thank you again. I am very familiar with the area, as I was born and raised here. the apartment complex is 2 blocks away from a small college and is considered to be on a good side of town. about 5 minutes away from all stores in town @Kenneth Garrett I adjusted the insurance as I mentioned above. the information I received from the realtor and property management company includes rent, property management cost, maintenance, deposit, and I can deduct vacancy all for the past year and a half. I appreciate your guy's input and you have helped me identify things I was missing. I'll keep you posted. I spoke with a bank and sounded like they might be able to work with low money down. they want a 2 year business plan and a business plan (which I thought were the same). I plan on increasing some of the rent as 3 of the apartments are renting for less than average compared to other apartments that are similar in size and number of rooms, and incorporating that into my plan. I'll look online for a guide on how to make a plan, but if you have any input it'll be greatly appreciated.

Hello all, I'm seeking advice on a 10 unit complex with 8 1 bedroom units and 2 studio apartments. The complex is:

$300,000

Down $60000

Rent income assuming $400 per unit= $48000 per year

Management at 10% rental income $4800

Maintenance $2500

Taxes $2000

Insurance $1500

Vacancy assuming 10% $500

NOI $36700

Cash on cash 61%

It seems like a great deal, if I'm missing something (which I'm sure I am) please let me know. There is a for rent sign through a property company outside, however on their website they are not advertising any units available so I'm assuming it's at least 80% occupied.

I currently have 10k for the down payment, which obviously won't cover all of it, so I was considering a hard money loan. It seems like hard money isn't really not an option for me as I have little skin in the game (duplex with ~10k equity), and I don't think the complex will appraise for > 300k. If the hard money lender does 65% of what it is listed at (195k). I did notice the complex was last purchased for 135k via Zillow, so I was wondering if I could leverage that in my offer (I honestly don't even know if that's reliable or accurate)? So maybe offer 200k and get them down to 195k if they accept, then refinance a year later to pay off the hard money lender? I want to get it under contract to inspect, but shouldn't I know that I have funds prior to doing this? I get that I can put earnest money down and just lose that money if I can't come up with the full funding, but I don't want to waste people's time and seem unreliable. So am I aiming a little high here and need to save more money? (I can save about 4k a month) Any advice is greatly appreciated. And if I need to clarify more I'm certain that I can.

Thank you,

Andrew

@Rebecca Belnap My real estate goals are to develop a social network with relators, accountants and attorneys in the area for guidance and opportunities. $2000 dollars a month passive income and sell one of the 5 properties I hope to own with at least 15% profit. I don't know if that's high or low, but it sounds good! @Dimitriy Fomichenko Thank you for the resources.
Since I have you guys here i have a couple questions.
I signed up for a coaching call through rich dad poor dad, is this something I should pursue? My interest is they offer mentorship, which is something that seems to be offered here. A mentorship would be great! However I feel like there's so much free information out there it causes me to hesitate. I know I need to invest in my education and want to. I just would like to know it is worth my while and won't be something I've already learned.
Another question I have is how to approach real estate agents. In this area they are involved with the vast majority of available property, should I treat them as a friend and asset or try to work around them (which makes me feels shady just writing it)
Thank you for any feedback! 

Thank you, and I surely will!

Hello,

My name is Andrew Jackson and I recently earned my Masters Degree in Occupational Therapy. I am interested in real estate investing to hopefully provide my family with opportunities to learn how to make money without laboring for someone else.